Keynes' liquidity preference theory asserts that the rate of interest is:

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Economics · Macroeconomics

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Determined by the equality of money supply and money demand.

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Answer 1

Determined by the equality of money supply and money demand.

Answer 2

Solely influenced by savings in the economy.

Answer 3

Constant irrespective of money supply changes.

Answer 4

Dependent on the marginal efficiency of capital only.

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